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Q2 Single choice

An internal auditor is performing an internal control assessment at a manufacturing company. The auditor observed that the accounts payable clerks have the ability to create new vendors without management's review and approval.

How should the auditor document this observation?

A
The observation doesn't affect the adequacy of the internal controls because the existing process controls ensure that invoices are promptly and accurately paid.
B
The observation is an internal control weakness; therefore, additional testing should be performed to
determine whether secondary mitigating controls exist or whether the control should be redesigned.
C
The observation is a sign of adequate internal controls; however, effectiveness testing should be
performed to ensure that the controls are operating as designed and intended.

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